[B]Forex Market Commentary for May 2, 2007 by Cornelius Luca[/B]
GFT Daily Forex Market Commentary
The dollar reversed early losses and then plowed higher against the euro, franc and yen. The manufacturing PMI report was strong and the US currency should advance today as well.
Euro/dollar
The overbought euro/dollar challenged its trend high and then fell enough to reverse all of the gains incurred on Friday. It will now challenge the support at 1.3585 and it must close below this sticky point to tell me that the big correction has started.
A break below this level of this consolidation would signal an initial slide to 1.3540 and 1.3525. Further support is pegged at 1.3470 and 1.3420.
If 1.3585 holds, then the pair would challenge the resistance at 1.3683. A break above this level means the euro/dollar will march higher, but I really don’t know why would that happen. Above 1.3735, resistance comes at 1.3805.
Oscillators are mixed.
NEAR-TERM: Mixed to slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen rallied to a two-week high and for as long as it can hold above 119.65, it will struggle further up.
Initial resistance is at 120.15. Distant resistance now comes 120.75.
Immediate support is at 119.65 from another 50-point pivot that targets 119.15 and 120.15. Below 118.85, strong support is still seen at 118.25 from a 50-point pivot that targets 117.75 and 118.75.
Oscillators are rising.
NEAR-TERM: Mixed to slightly higher
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Sterling/dollar
Sterling/dollar made a fake break on the upside and then it promptly returned its gains. Lower trading is expected.
Strong support is at 1.9935. A close below this level would signal that the trendline is broken and the Cable’s uptrend is in trouble. It would then challenge the 1.9850 area.
Initial resistance is at 2.0035. A close above it would suggest the start of the bullish flag. Above 2.0070, resistance remains between 2.0131 and 2.0151.
Oscillators are mixed.
NEAR-TERM: Mixed to slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss franc rallied to an 18-day high on Tuesday and challenged the top of the declining channel. The medium-term selling pressure remains in place, but is in jeopardy.
Initial resistance is at 1.2165 from the medium-term trendline. A break above this level would signal a more sustained recovery. The next level is 1.2200.
Immediate support is at 1.2110. The next levels are at 1.2035 and 1.2015. Below 1.1996 there is a key level at 1.1945.
Oscillators are mixed.
NEAR-TERM: Mixed to slightly higher
MEDIUM-TERM: Slightly bearish
LONG-TERM: Slightly bearish